The Effect Of A Salary Floor In New NFL Collective Bargaining Agreement

by mgrex03 on Jun 28, 2011 8:01 AM EDT in 2011 NFL Lockout

One of the many details of a new proposed Collective Bargaining Agreement between the NFL and NFLPA* that was leaked last week is an increase in percentage to the salary floor. In summary, it is a minimum each team must pay in salary, and it is a percentage of the salary cap value. Back in 2009, the CBA called for the floor to be 84% of the salary cap, with no floor on actual cash spent. Teams could play games with the numbers, including bogus "incentives" that both the player and team knew would never get paid out, to reach that 84%.

What leaked out last week was a salary floor percentage very close to 100% in cash, which means teams cannot play funny games with the cap numbers. They'll have to actually spend the money, in real dollars, each and every year. This seems to be a big win for the players, and for the fans, as every team will basically have the exact same salary, and there really cannot be any notoriously cheap or big spending owners. However, owners who have low revenue numbers are not too happy about it. From the ESPN story linked above:

The mandatory minimum spending increase is an element that concerns lower-revenue clubs, sources say.

The higher floor proposal could cause some problems for the lower revenue teams such as the Cincinnati Bengals and the Buffalo Bills. Along with the salary cap, teams have to pay an average of about $27 million a year in benefits.

Now, I'm making a distinction between small market and low revenue, as there is a big difference between the two. Before the start of last season, Forbes listed out the overall value of each franchise, including their annual revenue. For example, both Atlanta (7th largest market) and Detroit (10th largest market) are in the bottom 25% in terms of revenue, and both Bay Area teams, the 49ers and Raiders, are also in the bottom 25%, even though they are the 5th largest NFL market. On the flip side, the Ravens and Colts are the 9th and 10th smallest markets, but both rank in the top 10 of Revenue, so even though they are small market, they are certainly not low revenue.

Just how much money could certain teams lose? Lets take the Buccaneers as an example. USA Today keeps a salary tracker, and the Bucs had the 3rd lowest payroll in the league in 2009 at just $84.5 Million. If you look at their Operating Income in the Forbes list, they made the 4th most money of any team at $56 Million despite being 12th in revenue. This number, however, could be inflated based on sellouts in 2009, which they didn't experience in 2010. It's tough to tell at this point if that'll bounce back after a good season.

Doug Farrar from Yahoo! Sports recently said that the Buccaneers only have $64.4 Million in cash commitments for 2011, meaning they'll need to spend roughly $60 Million to comply with these new proposed rules, and $40 Million more than what they did in 2009. The Glazer family could stand to lose almost 70% of the income they saw in 2009. I'm guessing Mr. Glazer was one of the owners opposed to this part of the new CBA.

Now, the new CBA will also bring about more money for the owners in terms of percentage of revenues, so that value will most likely go up. Add in additional TV revenue they are looking to get, which could be in the neighborhood of $22 Million per team, and it makes up for that additional salary they'll be paying out. It's difficult to make a straight apples-to-apples comparison of 2009-2011 in terms of revenue/salary, because there will be a different distribution of funds, starting at the top.

How will this affect the Colts? For 2011, the Colts will have a good amount of money to spend, which is great for us fans. They only have $73.8 Million in cash committed for 2011, which means they'll have the same $50 Million to spend. Now there's a very good chance Peyton Manning will take up half of that number, but even if they back load the contract a little bit, they could have upwards of $30 Million to spend on Free Agents, both current Colts and FAs from other teams. The Colts have also not been shy in spending money in the past, spending the 9th most money last season at $133.1 Million.

Ultimately, I think the salary floor will be a net positive for all teams, regardless of market size or revenue stream. With the increased spending on salaries, the league should be extremely competitive. I'm of the belief that 'you have to spend money to make money', which several teams just don't do. I believe the best way to make money outside of Dallas, Washington, and New England, is to win games. If the Bills would win 10-11 games, they'd see that revenue go up, thanks to increased ticket sales, merchandise, food/beer, etc.

Winning cures everything, and the fact that teams will now be forced to spend money on players, rather than playing cap games to make it look like they are spending more than they really are, will make the league better, especially for the fans. And that's what we care about, right?

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Any chance for a follow-up article

Detailing how exactly we could spend our ~$50 million? Like you said, $18-25 mill will go to Peyton, but the remaining $25-30 million could be spent in a number of different ways. That number will surely take a hit after we sign our rookies, but with the incoming wage scale, it shouldn’t cripple us. Factor in the (hopefully) impending release of Diem (another $5 mill), and possibly Hayden, how much of a Free Agent splash can we expect to make??

by kmbryant09 on Jun 28, 2011 10:06 AM EDT reply actions

Hayden is not going anywhere

I don’t think Hayden is going anywhere. He was turning around a corner in the Coyer system with a couple of pick sixes and starting to play well before the injuries happened. He has more left in the tank than Diem does.

Diem is the one that needs to go.

by chad72 on Jun 28, 2011 11:14 AM EDT up reply actions

Even if he played well...

$9 million is too much. I’m all for keeping him, but it should be at a negotiated salary. Elite CB’s should make $9 mill. And Hayden ain’t elite. Heck, he hasn’t even been a good CB the past few years.

by kmbryant09 on Jun 28, 2011 11:58 AM EDT up reply actions 2 recs

Cap hit

We will find out what the cap hit is, if we were to release him. A lot depends on the new CBA. Yeah, he is paid $8.6 mil (source: http://www.sportscity.com/NFL/Indianapolis-Colts-Salaries), but Bob Sanders is still on the books for $5.5 mil. and I am not sure how many hits we can keep taking for players not on our roster if we do have a hit by releasing Hayden. One more injured or sub-par year, yes, it is time to re-negotiate or cut ties, IMO.

If we can keep Bob Sanders on IR for such preposterous amounts of money citing that he is a difference maker WHEN healthy, it is time to give Hayden one last year.

Plus, did you see this article on profootball focus:

http://www.profootballfocus.com/blog/2011/05/20/cornerbacks-cover-snaps-count/

It is unbelievable that 4 of the Colts CBs – namely Powers, Lacey, Tryon and Hayden are in the bottom 20 of catch percentage per cover snaps. Just goes to show you that our system is broke, flat out broke. Enough with the cushions already.

An example of our system being outdated is Tim Jennings. He figures in the top 20 for reception percentage and catch percentage per cover snaps. Anyone else wonder if he was not used right in our system?

I think the 5 or 6 yard cushions need to stop, just stop.

by chad72 on Jun 28, 2011 12:18 PM EDT up reply actions 1 recs

I don't necessarily agree with keeping Hayden, not for $9 mill.

But I agree about the cushions. It makes me sick; and I feel like Hayden is the biggest culprit. I don’t know who’s teaching them to line up 10 yards off the L.O.S. and to back-pedal right off the snap, but he needs to go.

We need bigger, physical, man-to-man CB’s….I like what I’ve seen from Powers & Tryon, word is that K. Thomas fits the bill, and Lacey should be serviceable as a nickel/dime CB. I just don’t think Hayden fits in with this philosophy since he’s more of a zone CB.

by kmbryant09 on Jun 28, 2011 1:21 PM EDT up reply actions

Man on the outside does not mean you cannot play zone on the inside

Good defensive coaches use the talent the best way they have.

If Hayden is best in zone, use Powers and Tryon outside while playing a zone inside with Hayden along with the safeties. In that case, I bet Hayden will make more plays. When we play man on the outside, it is not because we are blitzing but it is most likely because one of our safeties has to play up in the box due to our putrid run D up front. It is normally Cover 1 in those cases with Francisco or Bethea leaning towards one side.

A lot of teams play man on the outside with several combinations of zone underneath thus being able to extend coverage for slightly longer periods of time thus enabling their pass rush to get to the QB. A few yards of cushion to not be beat deep is fine but you have to be able to break on the ball quick enough, those are dependent on instincts.

Hayden, whether you like to admit it or not, has instincts to break on the ball if he is placed in a zone situation (unless the cushion is 8 or 9 yards which no good CB can overcome against a good QB & WR, let alone an elite QB), that is where he got his pick sixes since he knew he had safety help in the Houston Texans MNF game and the Bengals game. That is why I like using him inside.

Yes, I agree Hayden is not worth $9 mil. but neither is Brackett worth what he is paid either, IMO. We continue to overpay homegrown guys who know our system but then, drafting a zone CB and using him more in man situations is not getting the best use of Hayden, so move him inside and see our D be more stout.

Excessive cushions, not using our CBs in the right kind of situations (man vs zone), all fall on the defensive co-ordinator.

by chad72 on Jun 28, 2011 2:10 PM EDT up reply actions

Salaries

I look at that list of salaries and wonder why in God’s name where we paying Aaron Francisco $1.5 million.

by coltsfan88 on Jun 28, 2011 2:24 PM EDT up reply actions

mistake

*were we

by coltsfan88 on Jun 28, 2011 2:25 PM EDT up reply actions

if my memory serves.....

those int were thrown right to him. plus he dropped the game winning int vs the jags…. i don’t hate hayden as a player he just never lived up the contract given to him by bill polian.

by BLOODontheTRACKS on Jun 28, 2011 3:49 PM EDT up reply actions

How will owners spending more make the league better?

Spendign more money doesnt mean more stars will decide to enter the fold and play football, there arent good players beign left out in the cold…Spending more wont make players play any harder or be any better either.

Colts btw SHOULD be in the lower revenue “brackett”, but cuz Irsays a scumbag the money he should be paying into the costs of this stadium are instead going into his players pockets

Go Blue!

Revenue - Expenses = Profit

by dezznutz1001 on Jun 28, 2011 11:08 AM EDT reply actions

this was nonsensical and semi-deranged

Being in politics is like being a football coach. You have to be smart enough to understand the game and dumb enough to think it's important. -- Eugene J. McCarthy

by zherebyonki on Jun 29, 2011 2:47 PM EDT up reply actions 1 recs

Only semi?

As she would say, that’s disappointing.

"Perhaps it was the Noid who should have avoided me." Mayor Adam West

by insertscreenname on Jun 29, 2011 3:48 PM EDT up reply actions

It might end up overpaying for talent

I do think it will keep the Jerry Jones and Dan Snyders in check by limiting how many free agents they go after since they cannot go fuzzy math on the salary cap. The biggest winners are the middle of the pack players, who may end up being paid more for their services than necessary since all the teams that HAVE to spend the money will inflate their true value, IMO.

However, it might take away the chance to give an incentive laden deal to a few players that can be productive when healthy but can tend to be injury prone. You need some wiggle room there. The floor should be midway, around 92% or so, to allow for performance bonuses and other incentive laden deals to exist.

by chad72 on Jun 28, 2011 11:13 AM EDT reply actions 1 recs

Must Spend Money

That’s a lot more money to work with that I thought we previously had. I’m encouraged about potential activity in free agency.

by coltsfan88 on Jun 28, 2011 2:27 PM EDT reply actions

This may reduce competitiveness

I’m wondering if this could reduce competitiveness by making it difficult for teams to bank salary cap space during rebuilding years. For example, my last few years following the Vikings they had lots of extra salary cap space because a bunch of high priced veterans departed – Chris Carter, John Randle, Robert Smith, and finally Randy Moss. They did sign a few high priced free agents during that time, like Antoine Winfield and Pat Williams, but I don’t think it would have helped the team much to spend all of the surplus. Instead, they were able to effectively bank the cap space by use of dubious incentives which then rolled over to the following year. I haven’t been paying much attention to them lately, but I assume that helped them to sign Brett Favre and surround him with a supporting cast that almost took them to the Super Bowl.

Back to the Colts, they’ve been spending the money lately because they’ve been legitimate contenders every year. But fast forward a few years to when Peyton retires and their payroll drops $30 million. Would we want them to have to spend it all on whatever free agents are available that year? Or bank it a few years until the new QB is ready for a title run?

by ex-Viking fan on Jun 28, 2011 3:41 PM EDT reply actions

"banking" isn't a good term for what you're describing

i’d say simply “not spending” since it’s not like it increases the amount of money you get to spend in the future.

what about all those teams that are perpetually rebuilding/banking it up?

Being in politics is like being a football coach. You have to be smart enough to understand the game and dumb enough to think it's important. -- Eugene J. McCarthy

by zherebyonki on Jun 29, 2011 2:50 PM EDT up reply actions

now this

was a really good read. well done

by omahacolt on Jun 28, 2011 9:34 PM EDT reply actions

is it really a good idea forcing teams to spend money?

think about this for a second.
1. there will more than likely be a rookie wage scale
2. there are restrictions (currently) on renegotiating rookie deals
3. the talent doesn’t change suddenly just cause there is more money to spend

so teams have all this money. finally they don’t have to give ridiculous contracts to guys who have never played a down. but, they need to make up that difference, right? what if they already have their roster set? what if there is nobody of interest to them in free agency? what if the end result of this is that all it does is drive up the price of the truly talented? again, think about it.

1. teams are forced to spend money
2. there are only a select amount of players anybody really wants in free agency

wouldn’t it be worse if a bidding war for these players ensued that gave these players ridiculous contracts? imagine Nmadi this offseason getting caught on a bidding war. all of a sudden he is making more than Darrelle Revis (which Revis obviously doesn’t like since he held out cause of it). suddenly the Jets have to pay Revis more to feed his ego. now the NFL gets caught up with the unfortunate reality that the best players egos get in the way.

It does not feed the competitive balance to be forced to pay these men more for the same job. If the rookies are capped, there will already be more money to give to everyone else. forcing teams to spend more money will actually cause more problems than solutions.

"We talk football here, specifically the NFL and, more specifically, the New England Patriots."
"If you can’t treat others with respect, then you shouldn’t be commenting, period."

by statsare4losers on Jun 30, 2011 7:16 AM EDT reply actions

Like chad said above,

forcing teams to spend roughly the same amount of money will keep owners like Jones and Snyder in check, and will also get other owners, who normally don’t spend as much, to become more active in the FA market. It’ll even out the competition, imo.

"A leader is a dealer in hope."

by 35er on Jul 28, 2011 9:11 PM EDT reply actions